Electrolux CEO to Step Down After Failed Deal with GE
FILE PHOTO: Keith McLoughlin, chief executive officer of Electrolux AB, poses for a photograph following an interview in London, U.K., on Thursday, June 19, 2014. Electrolux AB agreed to buy General Electric Co.s home-appliances unit for $3.3 billion in cash, adding brands such as Hotpoint and GE Monogram with its biggest acquisition. Photographer: Chris Ratcliffe/Bloomberg via Getty ImagesPhotograph by Bloomberg via Getty Images
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Swedish home appliance maker Electrolux said on Monday its CEO Keith McLoughlin would retire and be replaced by senior executive Jonas Samuelson, just a month after the biggest deal in the company’s history collapsed.
McLoughlin will hand over on Feb. 1 to Samuelson, head of Electrolux’s Major Appliances Europe, Middle East and Africa (EMEA) division. Samuelson, 47, was previously chief financial officer of the firm, which he joined in 2008.
The change comes just a month after General Electric (GE) walked away from a $3.3 billion agreement to sell its appliances business to Electrolux in the face of opposition from U.S. Antitrust regulators, forcing Electrolux to pay a $175 million termination fee.
The failure of the deal, which would have seen Electrolux leapfrog Whirlpool as the world’s biggest appliances maker, raised questions about its future strategy.
In recent years, Electrolux has increased its focus on profitable segments like cooking, and boosted productivity through modularisation, or using more components common to a range of products.
“We will not change our basic strategy,” Samuelson told a conference call. “We will continue to improve cost, quality and flexibility, through for example modularisation of our product designs and through smart automation of our manufacturing processes.”
The 59-year old McLoughlin, an American who took the helm at Electrolux five years ago, said in a statement he would return to his family.
With McLoughlin’s family having returned to the United States several years ago, it was widely expected he could soon leave, even before the GE deal broke down. Samuelson had been the main internal candidate to replace him.
However, McLoughlin said immediately after the General Electric deal collapsed last month he remained committed to Electrolux and would continue as CEO.
The EMEA unit’s profitability has improved under Samuelson’s leadership, despite a tough market and intense price pressure. In the third quarter of 2015, it reached an operating margin of 6.3 percent, the highest since 2010.
Electrolux has shifted much of its production to low-cost countries over the past decade.
John Hernander, lead portfolio manager for Swedish equities at Nordea Asset Management, which had a 4 percent stake in the company as of Sept. 30, welcomed the choice of Samuelson as new CEO.
“In our opinion, Jonas has done a good job in turning around profitability of the European business, despite tough underlying market conditions,” Hernander said, adding he did not expect major changes to the firm’s strategy.